ijyr’''1 


' "s 

Oh&uncay • 


xirguiLont  of... Before  the  ^sciembly 


^ornnittae  on  ^i&ilroeds. . . 


, looO 


ARGUMENT 

OF 

HOI  CHAUFCEY  I.  DEPEW. 

GENERAL  COUNSEL  OF  THE  NEW  YORK  CENTRAL  AND  HUDSON 
RIVER  RAILROAD  COMPANY. 


BEFORE  THE 

ASSEMBLY  COMMITTEE  ON  KAILRQADS, 

IN  OPPOSITION  TO  THE  BILL 


“AN  ACT  TO  REGULATE  THE  TRANSPORTATION  OF  FREIGHT 
BY  RAILROAD  CORPORATIONS.” 


AND  ALSO  THE  BILL 


“AN  ACT  TO  CREATE  A BOARD  OF  RAILROAD  COMISSION- 
ERS  AND  TO  DEFINE  AND  REGULATE  THEIR 
POWERS  AND  DUTIES.” 


MARCH  17,  1880. 


ALBANY : 

PRINTING  HOUSE  OF  CHARLES  YAN  BENTHUYSEN  & SONS 


1880. 


ARGUMENT 


M/s.l/i.'f 


OF 

HOI.  CHAUNCEY  M.  DEPET. 

GENERAL  COUNSEL  OF  THE  NEW  YORK  CENTRAL  AND  HUDSON 
RIVER  RAILROAD  COMPANY. 


BEFORE  THE 

ASSEMBLY  COMMITTEE  ON  RAILROADS, 

IN  OPPOSITION  TO  THE  BILE 


“AN  ACT  TO  REGULATE  THE  TRANSPORTATION  OF  FREIGHT 
BY  RAILROAD  CORPORATIONS.” 


AND  ALSO  THE  BILL 


‘AN  ACT  TO  CREATE  A BOARD  OF  RAILROAD  COMISSION- 
ERS  AND  TO  DEFINE  AND  REGULATE  THEIR 
POWERS  AND  DUTIES.” 


MARCH  17,  1880. 


ALBANY : 

PRINTING  HOUSE  OP  CHARLES  VAN  BENTHUYSEN  & SONS. 


1880. 


n 9ia.7  c.>vs 


O 

M 


4 


ARGUMENT. 


The  Chairman — The  Committee  will  come  to  order;  Mr.  Depew  has 
the  floor. 

Mr.  Chairman — I have  appeared  many  times  in  the  last  fifteen  years 
before  committees  of  the  Legislature  in  the  discussion  of  these  freight 
problems  and  measures  affecting  the  railways  of  the  State.  Heretofore 
I have  been  almost  alone,  surrounded  on  all  sides  by  hostile  elements 
and  regarded  as  the  incarnation  of  that  monopoly  which  the  English 
dictionary  failed  to  furnish  a vocabulary  sufficiently  large  to  characterize 
and  foreign  tongues  were  brought  in  by  those  who  understood  them. 
But  I am  here  to-day,  at  the  close  of  a discussion,  the  most  extraordi- 
nary ever  witnessed  in  this  State,  and  in  the  midst  of  a gathering 
before  this  Assembly  committee  the  most  wonderful  we  have  ever  seen, 
in  which  the  business,  manufacturing,  industrial,  and  agricultural  repre- 
sentatives of  the  State  have  appeared  on  the  side  of  the  railway  com- 
panies, and  we,  instead  of  standing  in  the  front  and  battling  for  our 
lives,  have  been  compelled  to  take  a back  seat. 

Now,  then,  Mr.  Chairman,  this  most  extraordinary  spectacle  has  been 
brought  about  by  processes  to  which  it  is  necessary  briefly  to  allude.  The 
appeal  to  the  Legislature  which  resulted  in  the  appointment  of  this 
special  committee  did  not  come  from  any  interior  town,  did  not  come 
. from  any  interior  city,  did  not  come  from  any  manufacturing,  farming 
or  business  interest  in  the  State,  save  one.  By  processes  which  we  could 
not  control,  and  which  nobody  could  control,  the  jobbing  trade  of  the  city 
of  New  York  had  largely  slipped  out  of  the  hands  of  the  merchants  in  the 
city  of  New  York,  who  had  had  the  monopoly  of  it  for  a hundred  years, 
and  a portion  of  it,  by  the  natural  laws  of  trade,  was  transacted  in  the 
great  centers  in  the  central  and  western  parts  of  the  State.  The  jobbing 
interest  of  New  York,  consisting  of  about  thirty-two  houses  engaged  in 
this  business,  noting  this  fact,  determined  to  get  it  back,  and  they 
came  to  the  Legislature  pleading  their  cause  ; but  here  they  were  met 
by  the  whole  State  on  one  side,  they  being  on  the  other.  Then  they 
began  an  agitation,  and  worked  it  up  with  a shrewdness  and  ability 


4 


which  arouses  my  earnest  admiration.  Mr.  Thurber  admitted  upon 
this  floor  last  week  that  he  set  this  ball  in  motion  and  brought  about 
these  resuHs  by  the  free  use  of  printers’  ink.  There  is,  and  always  has 
been  in  the  State  of  New  York,  a sort  of  slumbering  feeling,  on  the  part 
of  the  agricultural  classes,  that  the  western  trade  was  interfering  with 
their  products  and  farms.  It  originated  long  before  the  railroad  was 
built.  It  began  when  the  Erie  canal  was  put  through  and  brought  the 
farmers  of  the  northwestern  States  in  competition  with  the  farmers  of 
this  State  ; and  the  farms  of  the  Mohawk  in  competition  with  the 
farms  of  the  Hudson  river,  the  farms  of  the  St.  Lawrence  river  and  of 
the  southern  tier.  In  looking  back  over  the  discussions  of  that  day,  I 
find  that  the  farmers  of  these  localities  fought  with  the  fiercest  energy 
and  unanimity  the  building  and  opening  of  the  Erie  canal,  and  claimed 
that  they  would  be  ruined  by  these  transportation  facilities  bringing 
the  cheaper  and  richer  lands  of  the  interior  and  western  part  of  the 
State,  and  of  the  western  Territories,  in  competition  with  them.  The 
present  outcry  against  the  railroads,  from  all  sources,  bears  no  com- 
parison to  the  feeling  exhibited  against  the  canal  at  that  time,  by  the 
farmers  alone. 

Now  Mr.  Thurber  and  his  committee  appealed  to  this  agricultural 
element,  and  formed  an  organization  which  was  partly  agricultural  and 
partly  political.  His  committee  furnished  it  with  its  pabulum  of  docu- 
ments, filled  with  a skillful  blending  of  facts  and  fancies,  admirably 
calculated  to  arouse  local  passions,  and  on  that  created  a sort  of  repre- 
sentation in  the  country.  Then  came  the  unparalleled  business  depres- 
sion, succeeding  1873,  with  its  panic,  when,  owing  to  excesses  growing 
out  of  speculations  following  the  war,  universal  bankruptcy  fell  upon  the 
whole  land,  and  all  enterprises  were  either  stagnant  or  ruined,  when 
thousands  of  men  were  thrown  out  of  employment  and  thousands  of 
industrious  men  became  tramps  upon  the  highway.  Appealing  to  these 
misfortunes,  which  we  could  not  control  and  in  which  we  were  all 
sufferers,  he  said  “ the  railroads  are  the  cause ; let  us  go  to  the  Legisla- 
ture and  get  relief.”  Well,  gentlemen,  he  came  to  the  Legislature  and 
they  gave  him  his  committee.  It  sat  for  eight  months  and  its  labors  are 
before  you.  We  are  here  to  discuss  both  its  report  and  the  statutes 
which  it  formulated. 

Now  in  regard  to  that  committee  I have  no  words  except  those  of  com- 
mendation and  praise.  That  committee  was  composed  of  men  of  intel- 
ligence, integrity  and  character ; but  it  had  the  misfortune,  which  is 
inevitable  in  all  such  cases,  of  having  upon  it  gentlemen  who  were  not 
familiar  with  the  great  transportation  problems  of  the  day,  arid  whose 
education  must  come  not  from  experience  but  from  the  limited  oppor- 
tunity afforded  by  the  investigation.  There  was  upon  it  none  of  the 


5 


great  shippers  who  control  this  vast  business  which  has  created  New 
York;  there  was  upon  it  none  of  these  manufacturers  whose  interests  have 
been  presented  here  with  such  force  and  emphasis  during  the  past  two 
weeks;  but  the  committee  went  to  work  with  rare  intelligence,  great 
skill  and  industry  to  develop  the  facts  bearing  upon  these  complaints  to 
see  if  they  really  existed  ; if  remedies  could  be  devised.  They  threw 
their  doors  wide  open.  The  Associated  Press  and  every  machinery  of 
advertisement  was  brought  to  bear  to  bring  before  them  every  possible 
grievance  and  every  possible  complaint.  Wherever  in  the  State  a com- 
plaint was  made  there  they  went  and  sat,  in  order  that  no  excuse  could 
be  offered  that  it  was  impossible  for  these  people,  on  account  of  their 
poverty  or  their  inconvenience,  to  reach  the  place  where  they  could  get 
their  grievances  before  the  committee.  After  sitting  for  eight  months, 
after  advertising  to  the  North,  the  West,  the  East,  the  South,  and  the 
interior  of  the  State,  if  any  locality  has  a grievance  we  do  not  ask  it  to 
come  to  us  we  will  go  where  it  exists.  What  is  the  result  P It  is  before 
you  in  these  five  large  volumes.  No  representative  of  the  great  manu- 
facturing interests  of  this  State  appeared,  no  locality  in  which  this  thriv- 
ing business  is  done  appears. 

The  Produce  Exchange  is  unrepresented,  the  Chamber  of  Commerce 
is  unrepresented,  the  Butter  and  Cheese  Exchange  is  unrepresented,  the 
American  Exchange  is  unrepresented  ; these  great  bodies,  and  others 
which  hold  in  their  hands  all  the  commerce  and  all  the  trade  of  the  great 
metropolis  are  wholly  unrepresented  in  the  testimony  before  this  com- 
mittee. The  manufacturers,  the  jobbing  and  retail  merchants  of  Syracuse, 
of  Utica,  of  Rochester,  of  Albany,  of  Troy,  are  none  of  them  to  be  found 
here  with  one  single  word  of  complaint ; and  outside  of  the  testimony 
which  was  taken  from  the  lips  of  the  railroad  officers  and  employees, 
there  is  no  testimony  bearing  upon  this  transportation  question’,  except 
that  of  one  or  two  witnesses  in  the  city  of  New  York  who  swore  to  imma- 
terial facts;  the  millers  of  Rochester  and  the  pork  packers  of  Buffalo. 
All  the  grievances  of  the  twenty  millers  of  Rochester  and  of  the  half- 
dozen  pork  packers  of  Buffalo  were  due  to  causes  beyond  the  reach 
and  past  the  control  of  the  railways  of  the  State  of  New  York,  and 
wholly  within  the  jurisdiction  and  within  the  control  of  railways 
chartered  by  other  States  and  outside  of  your  power  to  reach  or  to  limit. 
On  the  one  side,  in  these  five  bulky  volumes  of  testimony,  there  is 
arrayed  only  the  testimony  of  these  limited  interests,  represented  by 
less  than  twenty  witnesses;  and  on  the  other  side,  the  great  manufactur- 
ing, the  great  industrial  and  the  great  agricultural  interests  of  the 
State  stand  silent  because  they  had  no  complaint  to  make.  When  the 
work  of  this  committee  comes  before  you  for  your  action,  what  then 
happens  ? When  they  are  called  upon  to  present  their  bills,  they  find 
themselves  facing  a problem  which  has  received  the  attention  of  the 


6 


best  administrative,  the  best  railway,  the  most  experienced  talent  in 
this  and  other  countries,  resulting  in  a confessed  inability  to  solve  it. 
In  their  report,  with  great  ability  and  fairness,  they  state  the  difficulties 
which  surround  them ; and  I am  not  surprised  that  when  they  come  to 
formulate  these  difficulties  into  bills,  those  bills  meet  the  opposition 
which  here  presents  itself,  because  it  was  impossible,  with  their  ex- 
perience and  with  any  knowledge  which  they  acquired  in  that  investi- 
gation, if  they  had  possessed  the  combined  talents  of  Daniel  Webster, 
Henry  Clay  and  John  C.  Calhoun,  to  have  presented  bills  to  meet  these 
difficulties  without  crippling  the  railways  and  ruining  the  industrial 
interests  of  the  State.  Nothing  better  illustrates  the  exact  condition  of 
this  question  than  the  presentation  of  it  which  has  occurred  here  before 
yourselves.  Who  appear  here  on  the  one  side,  and  who  on  the  other  ? 

In  the  two  days  the  manufacturers,  merchants  and  produce  deal- 
ers were  here,  there  came  1,200  to  2,000  men,  and  they  represented 
between  three  and  four  hundred  millions  capital,  and  some  300,000 
employees,  and  in  the  families  dependant  upon  those  employees,  in  the 
incidental  business,  grouped  around  and  dependant  upon  their  factories, 
stores  and  dealings,  they  spoke  for  not  less  than  3,000,000  of  the  popu- 
lation of  this  State ; and  against  that  3,000,000,  who  appear  on  the  other 
side  ? The  call  is  loud,  the  drums  beat,  the  alarm  is  sounded  and  every 
element  favorable  to  these  measures  which  could  possibly  be  mustered  came 
here  last  Thursday,  they  were  less  than  a score  in  number,  only  the  old 
jobbing  interest  of  the  city  of  New  York,  which  set  this  ball  in  motion, 
the  representatives  of  the  affiliated  political  agricultural  organization 
which  they  had  created,  and  two  or  three  honest  and  well-meaning  men 
who  spoke  only  for  themselves.  Mr.  Sterne  came,  prophet  and  apostle 
of  railway  reform;  Mr.  Sterne,  an  able  and  learned  lawyer,  but 

who  never  shipped  anything  in  his  life  except  himself ; who  has 

studied  the  railway  problem  and  read  books  upon  it,  until  it  can 

almost  be  asserted  that  4 4 much  learning  hath  made  him  mad ; ” 

he  told  me  that  he  had  read  every  one  of  the  amalgamated  English 
reports,  which  are  three  feet  square  and  form  a pile  five  feet  high, 
and  no  man  could  wade  through  them  without  serious  danger  of  per- 
manent water  on  the  brain.  (Laughter  and  applause.)  He  developed 
his  usual  and  well-known  views  on  this  subject,  and  what  do  they 
amount  to  ? Simply,  that  upon  general  and  broad  principles  there  must 
be  an  equality  of  dealing  all  over  the  world,  and  unless  there  is,  we  are 
in  constant  peril  of  universal  disaster.  I do  not  propose  to  criticise  Mr. 
Sterne’s  address  any  further  than  this  : when  we  were  together  before 
this  investigating  committee,  I said  to  him,  “ Mr.  Sterne,  suppose  your 
theories  prevailed ; suppose  you  tie  up  with  an  iron-clad  statute,  or  any 
statute,  the  railways  of  this  State  to-day,  which  drives  them  out  of 
competition  for  the  through  business  and  raises  their  local  rates  and 


7 


diverts  over  affiliated  lines  with  short  hauls  in  this  State  the  business  of 
the  State  to  Philadelphia  and  other  seaboard  cities,  what  then  ? ” 
“ Why,  sir,”  said  he  “ you  will  establish  the  great  principle  of  truth  and 
justice  in  the  State  of  New  York,  and  as  soon  as  Pennsylvania  and 
Maryland  and  New  Jersey  and  Massachusetts  see  it  they  will  not  let 
New  York  suffer  many  years  before  truth  and  justice  will  prevail 
in  those  States.”  (Laughter.) 

The  only  trouble  with  his  proposition  is  that  the  business  men  of  this 
State,  the  manufacturers,  wholesale  and  retail  grocery  men,  dry  goods 
men  and  farmers  of  this  State,  have  not  in  them  that  sublime  spirit  of 
martyrdom  which  will  permit  them  to  loose  their  fortunes  in  order  to  im- 
press these  moral  lessons  upon  rival  and  neighboring  localities  which  are 
benefited  and  enriched  by  their  devotion  to  this  view  of  truth  and  justice. 
(Applause.)  My  eloquent  and  versatile  friend,  Senator  John  O’Donnell, 
came  here.  The  President  of  the  Utica  & Black  River  Road  has  stated 
his  magnitude  as  a shipper.  He  paid  me  many  compliments  for  which  I 
am  much  obliged  : but  one  statement  that  he  made  I think  fairly  charac- 
terizes the  accuracy  of  the  whole  of  his  argument.  He  said  that  Mr. 
Vanderbilt  and  himself  started  in  life  together,  that  he  knew  him  when 
he  had  only  a few  thousand  dollars  and  that  he  died  worth  a hundred 
millions;  while  he,  Senator  O’Donnell,  with  equal  industry  and  abilities, 
and  working  just  as  hard  had  accumulated  but  little  in  comparison. 
The  Commodore  died  five  years  ago  at  the  ripe  age  of  eighty-two,  and 
Mr.  O’Donnell  as  he  stood  here  and  fulminated  his  vigorous  eloquence, 
struck  me  as  the  best  preserved  orator  I ever  saw  in  any  assembly 
whatever.  (Laughter.)  Then  John  O’Donnell  No.  2,  (for  we  had  two 
dromios  in  this  farce),  (laughter)  appeared  and  said  that  he  was  a high 
officer  in  the  State  Farmers  Alliance,  and  unless  this  legislature  did  what 
he  told  them  the  vengeance  of  the  people  would  take  their  political  lives 
at  the  first  opportunity.  A member  of  Assembly  who  stood  behind  me 
said,  “ who  is  that  ? ” said,  I “ One  of  the  great  officers,  I don’t  know 
what  they  call  them,  of  the  Farmers  Alliance  in  this  State.”  “ He  a 
farmer  ? ” “ lie  so  states”  “why,”  says  he  “he  has  been  arguing  before 
my  committee  this  afternoon  to  have  us  report  a bill  to  raise  the  rates 
for  legal  advertisements  because  he  publishes  a country  paper  down  in 
Jamaica,  Long  Island,  and  wants  them  increased  so  that  he  can  have  a 
special  rate  for  the  benefit  of  that  local  journal.  (Applause.) 

Then  Mr.  Kilmer  came.  Now,  Mr.  Kilmer  is  a genius  in  his  way. 
Kilmer  is  the  great  milk  man — representative  of  the  milk  dealers. 
Kilmer  came  here  last  winter,  and  brought  not  only  his  association  of 
middle  men,  but  also  the  milk  producers  of  Orange,  Westchester, 
Dutchess  and  Columbia,  for  the  purpose  of  demanding  a reduction 
in  the  tariff  on  milk.  The  pressure  was  so  great  that  we  called  to- 


8 


gether  the  farmers.  I said  to  them,  “ I am  authorized  by  Mr.  Vander- 
bilt to  say  to  you,  that  without  any  bill  we  will  reduce  your  rate 
twenty-five  per  cent.,  one  quarter,  and  then  I will  stake  my  existence 
against  a russet  apple  that  you  do  not  get  one  farthing  of  it ; that  the 
consumers  get  no  benefit  from  it,  and  that  it  will  simply  take  money 
out  of  our  treasury,  and  put  it  into  the  pockets  of  these  dealers.  What 
was  the  result  ? We  made  the  reduction  of  one-quarter  in  our  rate, 
and  when  we  got  Mr.  Kilmer  on  the  stand,  on  a cross-examination,  we 
made  him  swear,  that  as  a middleman  and  milk  dealer,  he  never  gave 
one  penny  or  one  farthing  of  it  to  the  farmer,  never  gave  a penny  or  a 
farthing  of  it  to  the  consumer,  but  he  and  his  associates  pocketed  it  all 
themselves,  and  when  Mr.  Tozier  of  your  committee  asked  him  last 
week  if  that  was  not  so,  what  was  his  answer  ? Mr.  Tozier  said,  “ Did 
you  give  the  farmer  any  benefit  of  this?”  “Yes.”  “Well,  how?” 
“ Why,  if  the  railroad  hadn’t  reduced  the  rate,  we  would  have  reduced 
the  price  to  the  farmer.”  The  answer  reminded  me  of  the  argument  of 
the  brigand,  who  claimed  the  mercy  of  the  court  because  if  the  victim  had 
not  given  up  his  money  he  would  have  taken  his  life.  It  is  unnecessary 
to  go  through  with  the  other  gentlemen.  My  friend,  Harris  Lewis,  is  one 
of  those  honest,  well-meaning  men  for  whom  I have  a great  respect. 
He  has  the  integrity  of  his  convictions  and  of  his  life  behind  him. 
He  submitted  both  of  them  to  the  popular  verdict  last  fall.  He  got 
9,000  votes  out  of  900,000,  and  he  told  me,  as  he  sat  here  during  the 
debate,  that  the  only  reason  why  he  didn’t  get  them  all,  was  because 
he  could  not  induce  the  people  of  this  State  to  look  at  the  question  just 
as  he  did.  (Laughter.) 

Now,  then,  gentlemen,  another  spectacle.  When  this  bill  was  first 
presented  to  the  legislature,  it  received,  as  all  such  things  do,  the  assent 
of  nearly  all  the  men  both  in  and  out  of  the  legislature.  When  I spoke  to 
one  or  two  members,  and  endeavored  to  point  out  to  them  some  difficult- 
ies which  I thought  existed  in  the  bill,  they  looked  at  me  as  a railroad 
lunatic  who  could  not  be  satisfied;  as  much  as  to  say,  “ when  we  have 
the  ability  to  crucify  you  and  only  propose  to  put  you  in  the  stocks,  how 
unreasonable  you  are  ? ” But,  gentlemen,  when  this  bill  was  subjected 
to  the  criticism  of  the  experienced  railroad  men  of  the  State,  when  it 
was  subjected  to  the  criticism  of  the  business  men  and  manufacturers  of 
the  State,  when  it  was  subjected  the  criticism  of  the  men  who  do  the 
business  of  the  State,  then  the  theoretical  reformers  who  favor  the  meas- 
ure, saw  and  acknowledged  the  defects  and  consented  to  remove  them. 
They  made  five  important  amendments  to  this  bill,  which  otherwise  and 
heretofore  was  so  perfect  that  it  could  not  be  touched.  They  took  out 
the  passenger  clause,  they  took  out  the  pro  rata  clause,  they  took  out 
the  express  clause,  they  guarded  against  the  terminals  and  if  they  had 
stayed  here  one  more  day  the  bill  would  have  been  disemboweled  and 


9 


nothing  but  the  title  left.  The  report  of  the  special  committee  iterates 
and  reiterates  with  great  emphasis  precisely  the  difficulties  of  this  situa- 
tion which  they  attempted  to  solve.  Here  on  page  72  of  the  report  they 
say,  “ we  might  cripple  the  prosperity  of  New  York ; we  might  enact 
laws  that  would  build  up  Jersey  City  and  transfer  the  legitimate  growth 
of  New  York  to  the  Jersey  coast.  It  is  as  imperative  that  such  conse- 
quences be  avoided  as  it  is  that  present  wrongs  be  redressed.  While  the 
laws  of  commerce  ignore  political  divisions  wholly,  our  jurisdiction  is 
circumscribed  by  the  limits  of  the  State  of  New  York.” 

Then  on  page  74  they  say  “our  railroads  should  be  forbidden  to  make 
secret  rates,  and  compelled  to  treat  all  shippers  alike ; but  the  propriety 
of  compelling  the  publication  of  rates,  and  the  publication  of  all  pro- 
posed changes  is  a matter  for  your  serious  consideration.”  And  yet  the 
bill  in  its  practical  effect  amounts  to  that. 

On  page  75,  they  say : “ The  business  of  transportation  requires  the 
greatest  freedom  of  management  of  any  business  extant.  This  is  mani- 
fest to  the  most  casual  observer.”  Now,  there  is  no  business  extant  that 
is  hampered  by  the  iron  law  of  statute  ; there  is  no  manufacturing  in- 
terest, no  commercial  interest,  no  agricultural  interest  that  is  restricted, 
except  by  the  universal  laws  of  trade  ; and  if  this  railway  business,  in 
the  language  of  this  committee,  requires  greater  freedom  than  any 
business  extant,  what  propriety  or  necessity  is  there  for  these  bills, 
which  impose  limitations  and  restrictions  under  which  no  other  indus- 
tries could  live  ? The  trouble  with  all  this  question  is,  that  the  com- 
plainants are  gentlemen  who  never  use  the  railway.  The  parties  who 
are  satisfied  are  the  people  who  do. 

An  occasional  farmer  who  tills  a few  acres,  who  never  ships  anything, 
but  sells  all  he  raises  at  home,  and  finds  a ready  market  for  more  than  he 
can  supply  at  the  village,  factory,  or  store  in  his  immediate  neighborhood ; 
the  local  politician  who  is  looking  for  an  issue  upon  which  he  can  work  him- 
self into  office  as  the  people’s  friend ; the  citizen  who  has  no  occupation,  but 
sits  on  the  dry  goods  box,  or  the  nail  keg,  and  plays  the  oracle  upon  all 
questions,  these  people,  and  there  are  many  of  them,  read  the  tracts  of  the 
board  of  trade  and  transportation,  and  retail  them  in  support  of  this  legis- 
lation. But  the  farmers  who  ship  over  the  road,  the  produce  buyers  who 
give  them  New  York  prices  at  their  own  doors,  the  merchants  who  re- 
ceive their  stock  by  rail,  the  manufacturers  whose  existence  is  depend- 
ant upon  freight  charges,  the  dealers  of  every  kind  who  keep  trade 
flowing  through  these  great  arteries,  are  unanimously  opposed  to  it. 

The  difficulty  with  all  this  question  is  the  limited  and  circum- 
scribed jurisdiction  of  the  State.  This  great  railway  system  was 
never  contemplated  when  the  Constitution  of  the  United  States 
was  framed.  To-day  it  has  leaped  over  all  political  limitations,  and 
** 


10 


New  York  and  San  Francisco,  New  York  and  St.  Lonis,  New  York 
and  Chicago,  are  the  terminii  of  continuous  lines,  and  all  that  this  Leg- 
islature can  do  is  to  take  the  railways  of  the  State  of  New  York  by  the 
hair  of  the  head  and  lift  them  out  of  the  national  system,  and  hang 
them  up  to  dry.  But  if  they  do,  the  great  business  of  the  country  will 
go  on  around  New  York  just  as  well,  just  as  profitably,  just  as  economi- 
cally as  it  does  through  the  State,  and  the  only  community  injured,  the 
only  people  injured  will  be  our  own  citizens,  our  own  industries  and  our 
own  business. 

This  bill  necessarily  adjusts  the  local  to  the  through  freight  under 
heavy  penalties.  With  the  rates  of  the  great  through  business  of  this 
country  the  railways  of  the  State  of  New  York  have  no  more  to  do  than 
the  man  in  the  moon.  They  are  fixed  at  some  300  points  in  the  great 
west,  and  they  are  fixed  there  by  competing  and  connecting  lines  for 
the  purpose  of  getting  business.  The  western  cereals  pour  into  some 
reservoirs,  like  Chicago,  Milwaukee,  St.  Louis,  Detroit,  Cleveland, 
Toledo,  Indianapolis  and  Cincinnati,  and  there  the  Grand  Trunk  wants 
them  to  take  through  Canada  to  Boston ; there  the  Pennsylvania  road 
wants  them  to  take  through  Pennsylvania;  there  the  Baltimore  & 
Ohio  road  wants  them  to  take  through  Maryland  to  Baltimore ; there 
the  Mississippi  river  and  its  barges  want  them  to  take  down  the  Missis- 
sippi to  New  Orleans ; there  the  Chesapeake  and  Ohio  wants  them  to 
take  down  to  Norfolk,  and  there  we  want  them  to  bring  to  the  State  of 
New  York.  The  only  way  we  can  get  them  is  by  competition  with  rail 
lines,  lake  lines  and  river  lines,  all  hostile  to  our  interests  and  the  inter- 
ests of  our  State.  Yet  we  do  successfully  compete  because  we  say  to  these 
western  lines,  “ make  whatever  rate  you  find  necessary,  only  get  the 
business,  give  it  to  us  and  we  will  take  care  of  it,  and  take  our  share  of 
it,  whatever  it  may  be.  We  have  from  150  to  200  miles  longer  haul ; 
we  have  a lighterage  charge  in  the  city  of  New  York  which  Balti- 
more has  not,  Philadelphia  has  not,  Boston  has  not,  that  in  effect 
adds  200  miles  more  to  our  route,  and  yet,  in  spite  of  all  that 
we  will  bring  this  business  through  the  State  of  New  York  if  you  will 
make  the  rate  that  gets  it.”  And  the  bringing  of  that  business  through 
the  State  has  made  the  State  of  New  York  all  that  she  is  to-day. 
Without  it  what  would  have  been  the  State  ? It  would  have  had  a 
limited  population  at  its  seaboard,  and  limited  industries  in  its  interior. 
Without  it  the  State  would  have  had  none  of  these  great  cities  and 
thriving  towns  which  dot  it  everywhere.  Without  it  she  would  have 
been  provincial ; while  to-day  she  is  an  Empire,  dominant  over  all  of  her 
sister  States — first  and  foremost  in  population,  wealth  and  prosperity. 
Gentlemen  fail  to  appreciate  the  magnitude,  vastness  and  importance 
of  this  through  business  when  they  talk  so  lightly  about  this  matter. 
We  bring  to  the  city  of  New  York  more  of  the  product  of  the  West  than 


11 


are  carried  to  all  the  other  seaboard  cities  combined,  and  the  handling 
of  that  vast  commerce  brings  back  the  imports  to  the  city  of  New  York, 
places  in  our  hands  hundreds  of  millions  of  dollars  a year,  which  roll  over 
into  manufactories,  roll  over  into  country  cities,  roll  over  into  business, 
roll  over  into  everything  which  creates  localities,  business,  population 
and  prosperity. 

When  the  Erie  canal  was  opened  the  farmers  of  the  State  of  New 
York  had  the  West  brought  in  competition  with  them ; but  the  com- 
pensation to  the  farmer  of  the  State  of  New  York  is,  and  has  been,  that 
the  handling  of  those  immense  continental  products,  brought  here  by 
canal  and  rail,  has  created  and  produced,  within  the  limits  of  the  State 
of  New  York,  those  industries,  here  and  there  and  everywhere,  which 
have  made  centers  of  population  and  local  markets  which  absorb  all  he 
can  raise.  If  there  is  any  surplus  the  produce  buyer  goes  out  to  the 
farmer  who  has  a few  bushels  of  apples,  potatoes  or  wheat  which  he 
could  not  ship  to  the  city  of  New  York  employing  commission  mer- 
chants and  incurring  necessary  expenses  without  losing  the  whole  profit. 
The  produce  buyer  first  comes  to  the  railroad  and  gets  a special  rate 
that  will  enable  him,  on  account  of  the  quantity,  to  move  his  full  carload 
very  cheap ; then  he  goes  to  the  small  farmer  and  buys  from  him  at  the 
market  price,  saves  him  his  commission,  and  gives  him  the  benefit  of  that 
special  rate  and  ten  times  more.  The  competition  is  so  active  among 
these  produce  buyers  that  the  highest  market  prices  are  always  paid. 
reckon  eight-tenths  of  the  farmers  of  this  State  sell  their  products  directly 
to  .the  commnity  around  the  manufactories  which  exist  in  their  localities,  by 
main  strength  of  a special  rate,  and  the  other  two-tenths  dispose  of  them, 
at  a New  York  price,  to  a produce  buyer,  who  gives  them  the  benefit  of  his 
wholesale  freight  rate  as  an  inducement  for  the  purchase.  So  that  prac- 
tically, in  the  distribution  and  dissemination  of  rates,  the  people  of  this 
State  are  not  discriminated  against  even  in  the  smallest  shipments,  and 
at  the  same  time  they  derive  incalculable  benefits  from  the  through  busi- 
ness. The  volume  of  this  through  business  has  been  such  that  it  has 
enabled  the  railways  of  this  State,  within  the  last  eight  years,  to  reduce 
the  rates  upon  all  classes  of  local  merchandise  more  than  one-half ; 
whereas,  if  we  were  deprived  of  that  great  traffic  and  doing  exclusively 
a local  business,  we  would  raise  our  local  rates  necessarily,  and  the 
farmers  of  the  State  would  have  neither  the  home  manufactory  right  at 
his  door  to  sell  to,  or  be  able  to  live  on  his  farm  and  get  his  products  to 
the  city  of  New  York.  These  gentlemen  say  the  policy  of  the  New 
York  Central  railroad  is  to  crush  out,  and  that  it  has  crushed  out, 
the  local  business  on  its  line ; yet  since  1872,  in  the  face  and  eyes  of 
this  great  commercial  depression,  the  local  business  has  increased  thirty- 
five  per  cent.  There  are  500,000  farms  in  this  State,  and  36,000  new 
ones  have  been  brought  under  cultivation  during  that  period ; a result 


12 


which  would  have  been  impossible  unless  the  railways  of  the  State  had 
furnished  the  farmer  a manufactory  in  his  neighborhood,  or  a produce 
buyer  so  that  he  could  live  and  make  money.  The  railroads  of  the 
State  of  New  York  furnish  cheaper  passenger  fare  and  furnish  cheaper 
freight  rates  than  any  railroads  in  the  world.  The  passenger  rates  in 
Connecticut,  on  all  the  railroads  in  the  State,  are  four  and  a half  cents 
per  mile  per  passenger.  In  Maine  they  are  from  four  to  five  cents  per 
mile  per  passenger.  In  Pennsylvania  they  axe  three  and  a half  cents 
per  mile  per  passenger.  In  Michigan  they  are  three  and  a half  cents 
per  mile  per  passenger.  In  Illinois  they  are  four  cents  per  mile  per 
passenger.  In  Minnesota  they  are  four  to  five  cents  per  mile  per  pas- 
senger. In  Colorado  they  are  ten  cents  per  mile  per  passenger.  In 
England  they  are  four  cents  per  mile  per  passenger.  On  the  continent 
of  Europe  they  are  from  four  and  a half  to  five  cents  per  mile  per  pas- 
senger, and  in  the  State  of  New  York  they  are  three  cents  per  mile, 
and  on  the  New  York  Central  & Hudson  River  Railroad  they  are  two 
cents  per  mile  per  passenger,  one-half  the  average  rate  of  all  the  com- 
bined railroads  in  the  world.  (Applause.)  The  railroads  in  Connecti- 
cut, taking  them  all  together,  charge  six  and  a half  cents  per  ton  per 
mile  for  freight.  In  Maine  four  and  a half  cents.  In  Massachusetts 
four  and  a half  cents.  In  Pennsylvania,  five  cents.  In  Ohio  six  and  three- 
quarter  cents.  All  the  railroads  in  New  York,  altogether,  big  and  little, 
through  and  lateral,  charge  three  cents  per  ton  per  mile,  and  the  New 
York  Central  charges  ninety-three  hundredths  of  a cent  per  ton  per 
mile.  (Applause.)  That  is  what  this  grasping  and  overshadowing 
monopoly,  does  for  the  State  of  New  York.  The  railroads  of  the  State 
of  New  York  earn  ninety  millions  of  dollars  a year  of  which  sixty 
millions  is  taken,  by  way  of  toll,  out  of  the  products,  and  people  of  the 
great  northwest,  and  every  dollar  is  spent  in  the  State  of  New  York. 
There  are  seventy  railway  corporations  in  this  State  of  which  only 
seventeen  pay  dividends,  and  on  the  total  cost  of  the  railways  of 
this  State  their  total  net  earnings  only  yield  three  per  cent  upon  the 
investment.  There  is  not,  from  one  end  of  these  five  volumes  of  testi- 
mony to  the  other,  one  iota  of  evidence  that  a freight  rate  was  ever  given 
for  favoritism,  for  corruption,  or  for  reward.  The  combined  testimony  of 
every  man  who  appeared  before  that  committee,  and  of  every  man  who 
did  not  appear,  is  that  the  rates  given  by  the  railways  of  the  State  of 
New  York  are  given  for  business  reasons  with  business  justifications; 
that  they  are  given  upon  principles  which  must  regulate  all  railroad 
transportation,  magnitude,  bulk,  haul,  time,  expense,  and  movement ; 
that  they  are  given  for  the  purpose  of  developing  and  doing  the 
business.  Why,  gentlemen,  if  the  New  York  Central  Railroad,  situated 
as  it  is,  had  followed  a policy  during  the  last  twenty-five  years,  such  as 
would  be  enforced  by  the  operation  of  a law  regulating  and  depending 


13 


every  local  shipment,  upon  every  through  transaction  and  special  rate, 
either  by  distance,  or  maximum  rates  per  ton,  per  mile,  or  any  of  the 
panaceas  which  are  presented,  from  time  to  time,  all  the  business  of 
this  State  would  have  been  done  at  New  York  and  Buffalo,  and  the  rest 
of  the  line  would  have  been  a sparsely  populated  farming  commu- 
nity. "When  this  committee  states  that  competition  can  no  longer 
regulate  the  railways  of  the  country,  when  they  say  the  Legisla- 
ture must  step  in,  because  competition  has  failed,  they  must  except 
the  New  York  Central  Railroad.  The  rule  might  apply  to  a lateral 
road,  and  does  where  it  is  the  only  outlet  and  only  inlet  to  the  ter- 
ritory it  feeds ; it  might  apply  in  some  measure  to  the  Erie  road  on  a 
portion  of  its  line.  But  look  at  the  situation  of  the  New  York 
Central.  In  its  through  business  it  meets  every  competitor  on  the  con- 
tinent. In  its  local  business  the  canal  and  Hudson  river  touch  it  at 
every  station,  and  the  captain  of  the  steamboat,  sloop,  barge  or  canal 
boat  at  every  station  steps  into  every  store  and  into  every  shop,  and 
competes  with  it  for  business.  Every  twenty  miles  a railroad  from  a 
neighboring  State  reaches  the  line  of  the  New  York  Central,  and  tries 
to  take  away  its  business,  so  that  this  road  has  for  nine  months  in  the 
year  the  canal  and  the  Hudson  river  touching  every  single  station,  and 
the  whole  year  round,  at  Buffalo,  Batavia,  Rochester,  Utica,  Syracuse, 
Oneida,  Albany,  Schenectady,  Troy  and  other  points,  roads  with  only  a 
limited  line  in  the  State,  and  the  rest  running  outside  the  State,  outside 
of  your  jurisdiction,  competing  for  its  business  and  fixing  and  regulat- 
ing its  rates.  Railroads  owned  and  controlled  in  the  State  of  Pennsyl- 
vania, running  to  the  city  of  Philadelphia  by  a shorter  line  from  the 
same  points  than  we  have  to  the  city  of  New  York,  are  every  one  of 
them  to-day  saying,  “ For  God’s  sake,  gentlemen  of  the  legislature,  tie  up 
the  New  York  Central  Railroad,  and  we  will  get  rich  and  carry  the  product 
of  the  State  to  the  city  of  Philadelphia.”  No  such  competition — so 
active,  so  terrific — exists  anywhere  as  that  which  assails  the  New  York 
Central  & Hudson  River  railroad.  When  you  talk  about  discrimina- 
tion, do  not  these  discriminations  exist  everywhere  ? Where  do  they 
prevail  more  than  on  the  line  of  the  Erie  canal,  Lake  Champlain  and 
on  the  Hudson  river?  The  proprietor  of  a line  of  boats  on  Lake 
Champlain  told  me  last  night,  “ We  charge  more  for  twelve  miles  than 
we  do  for  one  hundred  and  fifty.”  This  bill  does  not  propose  to  regulate 
water-ways.  Says  I,  “ Why  do  you  do  that  ?”  He  says,  “ For  the  150 
miles  we  have  our  equipments  complete  at  both  ends,  and  it  costs 
us  nothing  additional  to  put  freight  on  the  boat.  For  the  twelve  miles 
we  are  obliged  to  keep  up  an  expensive  equipment,  which  does  not  pay 
at  a pro  rata,  or  even  a limited  part  of  the  through  rate.  We  have  to 
employ  special  men,  stop  the  boats,  and  lose  steam,  and  so  we  charge 
more  for  twelve  miles  than  we  do  for  150.”  Take  the  canal ; the  State 


has  made  it  practically  a free  water  way.  The  State  has  discriminated 
in  its  toll  sheet  against  its  own  citizen.  The  State  has  given  to  many 
agricultural  products  raised  in  the  west,  coming  in  direct  competition  with 
the  farmers  along  the  line  of  the  Erie  canal,  an  absolute  freedom  from  tolls. 
It  has  imposed  toll  upon  wheat,  but  wheat  has  ceased  to  be  a material 
product  of  this  State,  because  our  wheat  lands  have  given  out,  and  the 
testimony  of  the  millers  of  Rochester,  was  that  the  wheat  of  the  Gene- 
see Valley  was  now  of  so  poor  quality  that  it  could  not  be  milled  to  com- 
pete with  flour  made  from  western  grain.  Canal  discrimination  works 
in  this  way.  The  canal  boatman  goes  into  a village  along  the  line  of 
our  road  and  steps  into  a store  and  says,  “ I am  coming  back  empty, 
have  you  got  anything  in  New  York  you  want  brought  up  ? ” “ Yes,  I 

have  some  flour,  some  sugar,  some  molasses,  and  some  timothy  seed ; 
what  will  you  bring  it  up  for  ? ” “I  will  bring  it  up  for  twelve  cents  a 
hundred.”  “ Can’t  stand  that ; Captain  Jones  offered  to  bring  it  up  for 
ten  cents  a hundred.”  “ I will  bring  it  for  eight  cents.”  “ All  right,” 
he  goes  to  a rival  store  keeper  across  the  way  and  says  : “ Have  you  got 
anything  in  New  York  you  want  to  bring  up  ? ” “ Yes,  sir ; some 

molasses,  some  sugar,  some  flour  and  timothy  seed;  what  will  you 
bring  it  up  for  ? ” “Ten  cents  a hundred.”  “Ido  not  care  enough 
for  it  to  pay  that.”  “ I will  bring  it  for  eight  cents  a hundred.” 
“ I do  not  care  enough  for  it  to  |>ay  that.”  I will  bring  it  up  for 
five  cents.”  “All  right,  bring  it  up.”  That  occurs  every  day  in 
the  week — discriminations,  such  as  the  railroads  never  practiced,  and 
could  not  live  under  for  a single  hour,  are  of  daily  occurence  on  the 
highway  which  cost  ninety  millions  of  dollars  to  the  people  of  this  State, 
and  is  made  free  to  the  boatman.  There  is  not  a bill  in  the  Legis- 
lature to  control  this  discrimination  of  the  water  carriers  and  not  an 
effort  in  the  Legislature  to  correct  it : yet  it  is  seriously  proposed  in 
this  bill  to  tie  our  hands  so  that  we  cannot  compete  with  either  water 
ways  or  the  foreign  railways  which  tap  our  road.  This  is 
the  trouble  with  competition  on  the  line  of  the  New  York  Central 
Railroad.  Suppose  you  establish  by  law  that  no  more  shall  be  charged 
for  a short  haul  than  for  a long  one,  that  cotemporaneous  ship- 
ments shall  be  preciselythe  same  under  all  circumstances,  and  fix 
a heavy  penalty  for  every  violation.  What  follows  ? Why,  if  at 
Rochester,  Syracuse,  Geneva,  or  Lyons,  we  want  to  get  business 
and  prevent  it  going  to  Pennsylvania,  and  keep  it  in  the  State 
of  New  York,  and  take  it  to  the  city  of  New  York,  and  knowing  that 
we  are  bound  by  the  law  while  they  are  free,  these  Pennsylvania  com- 
panies compete  and  we  try  to  meet  it ; we  have  got,  on  that  day  and 
at  that  time,  to  lower  and  regulate  all  our  rates  along  the  whole  line  to  the 
reduction  at  the  competing  point,  or  else  suffer  the  penalty  or  abandon 
the  business,  and  no  people  understand  this  better  than  these  lateral 


15 


lines.  They  know  that  we  must  permit  them  to  take  the  whole  of  the 
business  at  a single  point  rather  than  lower  our  rates  along  the  whole 
line  of  our  road  to  keep  the  business  at  that  place.  Then  the  question 
arises,  how  do  we  keep  the  business  in  competition  with  them  at  that 
single  point  now?  Simply,  because  if  the  Lehigh  Valley  attempts  to 
steal  away  our  business  at  Geneva  or  Lyons,  or  the  Pennsylvania  road 
at  Rochester  or  Buffalo,  or  the  Delaware  & Lackawanna  at  Syracuse, 
Oneida  or  Utica,  we  meet  them  at  that  point  on  terms  upon  which  they 
can  get  no  business  at  all ; and  knowing  that  we  hold  that  club,  they 
do  not  dare  do  otherwise  than  fairly  treat  with  us  the  business  of  that 
locality  and  take  their  legitimate  proportion.  And,  holding  this  power, 
we  can  enforce  equity  of  rates  to  competing  and  non-competing  points 
alike.  But  if  we  had  to  adjust  the  business  along  450  miles  to  the  com- 
petition of  one  single  station,  then,  of  course,  the  road  that  reached  that 
station  in  competition  with  us,  running  outside  the  State  beyond  the 
jurisdiction  of  your  law,  would  take  the  business  of  that  locality  and 
carry  it  to  foreign  States  and  cities.  Within  one  year  after  this  bill  be- 
came a law  the  whole  business  of  the  city  of  Syracuse,  of  which  we  now 
do  ninety  per  cent,  would  be  done  by  outside  lines  partly  running  to  the 
city  of  New  York,  and  partly  diverging  to  the  city  of  Philadelphia. 
While  rates  would  be  made  from  the  city  of  Syracuse,  which  would 
make  competition  and  business  at  places  like  Auburn,  which  are  not 
reached  by  outside  lines,  utterly  and  wholly  impossible.  The  bill  under 
consideration  is  the  product,  as  I understand  it,  of  enactments  partly  in 
existence,  and  partly  repealed  in  three  or  four  States  in  the  Union. 
I make  this  bold  assertion : that  in  the  States  where  the  parts  of 
this  statute  are  now  in  effect  the  local  conditions  under  which  they  were 
passed,  are  wholly  different  from  the  local  conditions  affecting  the  New 
York  Central  Railroad. 

A statute  might  be  passed  which  the  Boston  & Albany  Railroad 
in  Massachusetts  could  live  under,  having  none  of  these  competitions  on 
its  line,  but  which  would  absolutely  ruin  the  New  York  Central  Railroad, 
and  drive  it  out  of  business.  The  experience  of  the  Western  States  is 
suggestive.  They  entered  into  this  business  of  legislation  with 
unanimity  and  with  great  force  and  vigor,  but  when  the  blight  of 
industrial  manufacturing  and  agricultural  depression  fell  upon  their 
farms  and  business;  when  their  credit  failed,  and  they  could  get  no 
money  for  their  enterprises,  they  rescinded  all  their  granger  laws.  But, 
while  they  were  in  force,  seventeen  railroads  in  the  State  of  Illinois, 
and  eleven  in  Wisconsin,  went  into  bankruptcy,  and  the  losses  of  the 
people  of  those  States  cannot  be  calculated  in  money,  because  it 
reached  population,  development  and  confidence,  which,  once  lost,  cen- 
turies cannot  replace.  Iowa,  with  its  long  lines  far  distant  from  each 
other,  and  having  no  local  competition  by  rail  or  water,  presented  a fine 


16 


field  for  this  kind  of  legislation,  and  conditions  exactly  the  reverse  of 
those  which  exist  in  this  State.  Yet  Iowa,  after  a full  trial,  last  year 
repealed  most  of  her  laws,  because  they  proved  equally  injurious  to  the 
State  and  the  railroads. 

I will  read  the  Iow'a  law,  and  you  will  see  how  much  more  liberal  and 
elastic  it  is  than  the  bill  under  consideration:  “No  railroad  company 
shrill  charge  any  person,  company  or  corporation  for  the  transportation 
of  any  property  a greater  sum  than  it  shall,  at  the  same  time,  charge 
and  collect  from  any  other  person,  company  or  corporation  for  a like 
service  from  the  same  place,  and  upon  like  conditions ; and  all  conces- 
sions of  rates,  drawbacks  or  contracts  for  special  rates,  founded  upon 
the  demands  of  commerce  and  transportation,  shall  be  open  to  all  per- 
sons, companies  and  corporations  alike.” 

That  law  wTas  repealed,  and  yet  the  New  York  Central  Railroad,  with 
hardly  an  exception,  lives  up  to  like  principles  to-day. 

What  I have  said  here  upon  the  general  question  will  largely 
apply  to  the  second  section  of  this  bill.  The  trouble  with  your  equal 
rate  for  a cotemporaneous  shipment,  regardless  of  different  conditions, 
and  applying  alike  to  the  man  who  contracts  for  a year  and  one  who 
makes  only  single  and  casual  shipment,  is  this  : All  the  manufacturers 
who  were  before  you  testified  that  it  was  absolutely  necessary  for  them 
to  make  time  contracts ; that  befort  they  had  the  cotton  or  the  wool  in 
their  mills  they  had  sold  the  manufactured  product ; and  they  could  not 
sell  that  manufactured  product  unless  they  knew  what  the  freight  rate 
was  going  to  be  at  the  time  it  would  probably  be  shipped ; therefore 
they  must  have  a contract  in  advance  for  the  purpose  of  making  their 
transactions.  The  contract  is  made,  for  instance,  with  the  New  York 
Mills  at  Utica,  and  upon  that  they  base  all  their  bargains  and  sales. 
The  contract  is  a low  one,  because  of  the  certainty  and  volume  of  the 
business,  and  is  made  for  the  purpose  of  fostering  an  industry  in  our 
State  in  competition  with  rival  establishments  in  other  States.  But 
under  this  bill,  on  any  day  in  the  year,  a like  shipment  of  a single  car- 
load for  a single  specific  purpose  must  receive  absolutely  the  same  rate 
as  we  get  on  that  day  under  that  contract.  The  manufacturer  loads 
and  unloads  his  own  freight,  furnishes  his  own  side-tracks  and  ware- 
houses, gives  us  his  whole  business  all  the  year  round,  and  all  of  it  goes 
out  of  the  State  to  a distant  market ; and  yet  all  of  our  local  and  purely 
State  business  must  every  day  be  done  at  the  same  rate  as  that  manu- 
facturer pays.  This  bill  applies  to  the  leased  lines.  The  absolute  cost, 
as  far  as  it  can  be  ascertained,  of  hauling  a ton  of  freight  over  the  New 
York  Central,  on  account  of  its  grades  and  the  magnitude  of  its  through 
business,  will  be  ninety  one-hundredths  of  a cent  a ton  a mile.  The 
absolute  cost  of  hauling  a ton  of  freight  over  the  New  York  & Harlem 


17 


railroad,  which  we  lease,  and  which  is  a local  line  with  only  a local 
business,  is  six  cents  a ton  per  mile  ; and  yet  under  these  provisions  we 
would  be  compelled  to  transport  freight  from  some  point  on  the  line  of 
the  New  York  Central  to  a point  equally  distant  on  the  New  York  & 
Harlem  railroad  at  the  same  rate  as  we  do  upon  the  New  York  Central. 
If  two  shipments  were  made  from  the  same  point  on  the  Central,  one  to 
go  partly  on  the  Harlem  and  the  other  wholly  on  the  Central,  the  one  on 
the  Harlem  might  be  the  shorter  and  yet  cost  us  five  times  as  much  as  the 
one  on  the  Central ; but  if  we  charged  any  more,  we  should  be  liable  to  all 
the  penalties  of  this  act.  Then  there  is  a clause  in  reference  to  making  a 
combination  rate  over  two  connecting  lines.  That  has  been  tried  in  the 
State  of  Massachusetts,  and  the  Massachusetts  people  say  they  find  it 
impossible  to  carry  it  into  effect,  that  they  can  get  no  light  from 
the  railway  commissioners  upon  the  subject,  and  that  practically  it 
is  a dead  letter.  For  the  simple  reason  that  you  cannot  so  adjust  by 
law  that  the  line  which  receives  the  goods  shall  fix  for  a connecting  and 
independent  road  to  which  it  may  deliver  them  the  price  that  road  may 
choose,  nor  can  you  say  that  whatever  the  New  York  Central  charges 
from  New  York  to  Syracuse,  it  shall  make  no  greater  rate  over  the 
Utica  & Black  River  road  to  Watertown,  when  what  would  be  a 
profit  to  the  New  York  Central,  would  bankrupt  this  expensive  lateral 
line  for  the  same  distance. 

. • 

The  third  section  of  this  bill  prohibits  special  rates.  I assert  that 
the  present  position  of  the  State  of  New  York  in  its  relations  to  the 
other  States  of  the  Union  both  justify  and  demand  special  rates,  if  New 
York  would  retain  her  local  industries.  There  was  a time  when  New 
York  and  the  Eastern  States  furnished  the  West  and  South  with  all  the 
manufactured  articles  they  consumed ; but  facilities  for  transportation 
and  the  laws  of  trade  are  such  that  in  the  sharp  competition  of  modern 
business,  production  and  consumption  every  day  come  closer  and  closer 
together.  To-day  every  kind  of  manufactory  is  in  successful  operation 
in  Illinois,  Kansas,  Missouri,  Wisconsin,  Iowa,  and  Minnesota,  right  at 
the  place  where  the  products  are  to  be  sold.  Under  these  circumstances 
iron  foundries,  agricultural  machine  works,  cotton  or  wollen  mills,  stove 
works,  wagon,  glass  and  other  factories,  supplying  the  wants  of  those 
Western  States  have  no  business  to  exist  in  the  State  of  New  York. 
They  remain  here  and  prosper  unnaturally  and  by  violence.  One  of 
the  speakers  here  last  Thursday  said,  that  if  they  did  exist  here 
unnaturally — then  let  them  be  blotted  out.  But  as  a citizen  of  New 
York,  that  man  did  not  understand  what  he  was  talking  about.  If  there 
is  an  agricultural  machine  factory  at  Auburn,  Poughkeepsie  or  Hoosic 
Falls,  and  we  carry  the  raw  material  to  them  for  practically  nothing, 
and  then  carry  their  manufactured  products  without  profit  to  us  and  put 
them  in  Chicago  along  side  of  McCormack’s  manufactory  so  they  can 


be  sold,  in  competition  with  him,  who  is  injured  in  this  State  ? 
What  business  is  injured  in  this  State  ? On  the  contrary  we  build  up 
at  Auburn,  Poughkeepsie  or  Hoosic  Falls  a great  manufactory  which 
sustains  and  supports  directly  and  indirectly,  ten  or  fifteen  thousand 
people.  We  get  their  local  business  to  transact  at  local  rates,  and 
the  State  gets  the  use  of  that  capital  and  the  taxation  upon  that 
property.  What  business  have  iron  industries  at  Spuyten  Duyvil  or 
Albany  or  Troy,  when  the  same  industries  are  located  at  Pittsburg 
hundreds  of  miles  nearer  to  Chicago,  fostered  and  encouraged  by  the 
Pennsylvania  Railroad,  and  receiving  a special  rate,  or  located  at  or 
so  near  Chicago  that  they  have  no  freight  charges  to  pay.  What  busi- 
ness has  the  Troy  or  Albany  stove  works  to  compete  with  them  ? Only 
by  such  a violation  of  the  laws  of  trade  and  transportation  as  would 
be  impolitic  and  impossible  if  the  United  States  had  no  state  lines,  and 
uniform  laws  governed  every  railroad  in  the  country,  and  the  statute 
which  prohibited  the  New  York  roads  from  making  special  rates  bound 
also  the  roads  of  New  Jersey,  Pennsylvania,  Ohio,  Maryland  and  Mich- 
igan. But  we  can  make  a rate  for  iron  to  the  Troy  and  Albany 
foundry ; we  can  make  a rate  for  stoves  from  the  Troy  and  Albany 
foundry,  the  raw  material  to  it  and  the  manufactured  article  from  it 
which  is  secret  and  unknown  to  the  Pittsburgh  or  Chicago  foundrymen, 
but  will  place  those  stoves  in  Chicago,  and  the  foundry  can  stay  in  Troy 
and  Albany.  It  can  draw  millions  of  dollars  a year  from  the  people  of 
Illinois,  Iowa,  Wisconsin  and  Kansas ; it  can  bring  that  money  back 
into  the  State  of  New  York,  to  be  spent  in  Albany  and  Troy.  Twenty, 
fifty,  yes  a hundred  thousand  people  can  be  supported  and  sustained, 
where  we  get  the  local  rate  on  their  local  business,  where  the  State  gets 
the  taxes  and  the  benefit  of  the  expenditure,  and  who  is  injured  ? 
Why,  the  stove  works  at  Pittsburgh  or  Chicago  are  injured  ! The  stove 
works  at  Pittsburgh  or  Chicago  are  discriminated  against.  And  are  we 
to  legislate  to  transplant  these  stove  works  to  Pittsburgh  or  Chicago 
because  we  have  to  violate  the  generally  accepted  laws  of  transportation, 
and  to  discriminate  in  order  to  unnaturally  keep  the  business  within 
our  own  State  ? (Applause.) 

There  are  four  hundreds  of  millions  of  dollars  invested ; there  are 
three  to  four  hundred  thousand  men  employed  to-day  in  the  State  of 
New  York  in  manufactories,  scattered  from  New  York  to  Buffalo,  making 
the  prosperity,  the  population,  the  industry  of  every  locality  where  they 
are,  which  receive  their  raw  product  from  without  the  State,  and  trans- 
port and  sell  their  manufactured  articles  without  the  State,  in  a distant 
market,  in  competition  with  similar  industries  located  right  at  those 
markets,  by  discrimination,  by  evading  the  regular  laws  of  transporta- 
tion, by  concealing  the  fact  from  their  competitors  in  those  States,  and 
living  at  those  markets.  Who  is  injured  ? Why,  men  doing  similar 


19 


work  at  Detroit,  at  Toledo,  at  Cleveland,  at  Milwaukee,  at  Chicago,  at 
St.  Louis,  they  are  injured;  they  are  discriminated  against;  they  fiujl 
these  manufactures  of  New  York,  with  all  the  expense  of  transportation 
which  ought  to  be  charged  upon  them,  coming  there  and  competing  suc- 
cessfully with  them  in  their  own  market.  What  is  the  result  ? The 
result  is,  that  four  hundred  millions  of  capital  are  employed  ; that 
four  hundred  thousand  men  are  busy  and  thriving;  that  three  millions 
of  the  population  of  this  State  are  supported,  the  towns  thrive,  and  the 
farmers  find  a local  market.*  The  State  can  be  made  the  first  manufac- 
turing and  agricultural,  and  the  richest  and  most  prosperous  State  in 
the  Union,  and  yet  we  must  stop  it  all  to  help  Mr.  Thurber  to  sell  groceries 
in  Syracuse.  (Applause.)  When  I look  at  the  spectacle  presented  here  ; 
the  magnitude  of  the  interests  on  the  one  side ; the  absurdity  of  the 
demand  for  restrictive  legislation  on  the  other,  I am  reminded  of  a 
lecture  once  given  by  the  celebrated  orator,  Tom  Marshall  of  Kentucky,  at 
Buffalo.  Wonderful  as  were  Marshall’s  powers  he  never  was  more 
brilliant,  more  magnetic,  more  superb  than  on  that  occasion.  The  hall 
was  crowded  to  its  utmost  capacity.  Every  time  one  of  his  splendid 
bursts  of  eloquence  thrilled  the  audience  so  that  the  slightest  whisper 
could  be  heard  all  over  the  house,  the  climax  would  be  spoiled  by  a 
voice  in  the  rear  of  the  audience  shouting  “ louder,  louder.”  (Laughter.) 
Finally  Marshall  roused  to  profoundest  indignation  said,  “ when  the 
end  of  the  world  shall  come,  and  in  the  wreck  of  matter  and  the  crash  of 
worlds,  Gabriel  shall  blow  his  trumpet,  and  the  sound  of  that  magnifi- 
cent music  shall  fill  the  universe,  and  call  the  dead  of  all  time  from  the 
sea  and  from  the  land,  there  will  be  a man  from  Buffalo,  standing 
in  that  countless  throng,  shouting  4 louder,  louder.’  ” (Laughter  and 
applause.)  I do  not  want  to  be  personal  on  Mr.  Thurber  or  his  com- 
mittee. (Laughter.) 

Mr.  W.  C.  Clark — No,  for  he  is  a good  deal  better  man  than  you  are. 

Mr.  Depew — Thank  you  for  the  compliment ; because  I know  now 
just  how  good  a man  I am  ; and  by  the  way,  as  my  friend  here  says  Mr. 
Thurber  is  a much  better  man  than  I am,  a statement  I will  not  dispute, 
allow  me  to  digress  for  a moment,  and  read  some  extracts  culled  from 
his  speeches  and  the  publications  of  his  committees,  in  illustration  of  the 
opinions  he  and  his  associates  have  of  us  railroad  men  : “ an  ‘ organized 
body’  of  ‘reckless,’  ‘unscrupulous,’  ‘ dishonest,’ ‘ insolent,’  ‘despotic,’ 
* grasping,’  ‘ terrible,’  extortioners,’  ‘ grinding  down  the  people  with  an 
iron  heel,’ ‘ destroying  all  industries,’ ‘ recognizing  no  responsibility  to 
the  government  or  State,’  ‘ guilty  of  intrigue,’  ‘ robbery,’  ‘ rapacity,”  and 


•In  1870  the  amount  of  capital  invested  in  this  State  in  manufacturing  alone  was  >#.'566,994,820 — 
giving  employment  to  3)1,800  persons  who  were  paid  #142,466,758.  The  value  of  the  products 
was  8785,194,651.  In  ten  years  the  capital  and  labor  employed,  and  the  value  of  the  products 
have  increased,  at  the  very  least,  fifty  per  cent. 


20 


‘bribery;  ‘soulless,’  (but  some  how  or  other  ‘crossing  the  chasm  of 
death ; ’ ) ‘ terrible  foes  to  political  aspirations  ; * ‘ more  dangerous  than 
Robespierre,’  and  ‘ worse  tyrants  than  Nero,’  though,  as  he  says  in 
another  connection,  ‘ no  better  or  no  worse  than  the  rest  of  mankind.” 
(Applause.)  I am  an  old  school  Presbyterian  and  believe  in  total 
depravity  and  eternal  damnation ; but  I think  my  friend  Thurber  has  a 
worse  view  of  it  than  I have.  (Laughter  and  applause.)  Gentlemen 
who  hereafter  in  these  discussions  are  at  a loss  to  find  terms  in  which 
to  express  their  hostility  to  the  railroads,  ought  to  be  very  grateful  to 
me  for  collecting  this  exhaustive  vocabulary  from  which  they  can  select 
at  pleasure. 

While  it  falls  to  my  duty  to  criticise  the  position  and  views  of  Mr. 
Thurber,  on  these  questions,  and  the  methods  by  which  he  seeks  to  en- 
force his  opinions,  I respect  the  great  energy  and  ability  with  which  he 
prosecutes  all  his  undertakings.  I have  seldom  had  an  opportunity  to 
agree  with  him,  but  the  admissions  made  by  him  here  last  Thursdaj7, 
seem  to  me  to  surrender  every  excuse  for  the  passage  of  this  bill.  In 
response  to  a question  by  a member  of  your  committee,  he  said  he 
thought  the  manufacturers  in  this  State  ought  to  be  protected  by 
special  rates  in  their  competition  with  manufacturers  outside  the  State. 
Then  you  cannot  pass  this  bill  in  its  present  shape,  or  in  any  form  which 
has  been  suggested.  Once  admit  the  necessity  of  these  discrimina- 
tions and  legislation  becomes  impossible.  You  cannot  frame  any  gene- 
ral act  which  will  not  stop,  at  once,  the  granting  of  these  privileges 
which  the  energetic  and  able  leader  of  the  friends  of  this  measure  here 
publicly  declared  to  be  both  necessary  and  wise. 

Why,  gentlemen,  to  build  up  these  manufactories  there  have  been, 
within  the  time  you  have  been  members  of  this  House,  great  numbers 
of.  bills  introduced  to  exempt  them  from  taxation,  on  the  plea  that  the 
locality  was  willing  to  bear  all  the  burdens  to  induce  capital  to  start 
these  industries  in  the  neighborhood.  Towns  and  villages  have  gone 
even  further,  and  four  or  five  years  ago  a perfect  flood  of  bills  were  pre- 
sented to  enable  villages  to  contribute  to  the  capital  of  local  manufactur- 
ers, and  they  were  only  defeated  because  they  were  unconstitutional. 

I will  call  attention  to  only  one  other  feature  of  this  bill,  which  provides 
like  rates  for  like  classes  of  freight ; this  would  compel  us  to  carry  pig 
iron,  flour,  sugar,  molasses,  grain  and  great  numbers  of  articles  in  the 
same  general  classification,  but  totally  different  in  bulk  and  value  at 
the  same  rate.  Railroad  classifications  are  made  for  the  convenience  and 
not  price.  This  law  would  compel  us  to  make  a different  classification 
for  every  single  article  we  transported,  and  make  a volume  larger  than 
the  Session  Laws.  Nothing  better  exhibits  the  jumble  of  conflicting 
statutes  from  which  this  bill  is  copied,  than  its  various  provisions  in  ref- 


21 


erence  to  charges  by  distance.  The  second  section  prohibits  charging 
more  for  a shorter  than  a longer  distance.  The  third  section  prohibits 
the  same  thing  twice,  and  in  different  form  and  language ; it  also  con- 
tains a strict  pro  rata  clause.  It  is  doubtful,  upon  any  construction  of 
all  these  provisions,  if  any  business  could  be  done  without  endless  liti- 
gation. The  limit  of  the  car  load  I shall  not  discuss ; that  has  been  thor- 
oughly exploded  by  others.  The  penalty  part,  I will  say  a few  words  upon. 
This  bill  provides  that  for  every  violation  of  it,  no  matter  what  it  may  be, 
or  how  innocently  done,  and  you  all  see  how  difficult  it  is  to  interpret  it,  the 
party,  aggrieved  shall  recover  the  amount  of  his  damages,  and  also  $100; 
the  $100  being  in  the  nature  of  an  informer’s  fee.  Now,  gentlemen,  just 
see  how  this  would  work : a train  load  of  fifty  cars  comes  into  Buffalo ; in  it 
are  cars  gathered  from  all  over  the  west,  each  one  with  a rate  made  at  some 
one  of  three  hundred  different  places,  so  that  our  proportion  of  the  freight 
charge,  from  the  point  of  shipment  to  New  York,  varies  with  every  car. 
One  car  may  come  from  San  Francisco,  one  from  St.  Louis,  one  from  Mil- 
waukee, one  from  Kansas  City,  and  so  on.  Under  the  rates  that  are 
made,  some  competing,  and  some  under  the  pool,  every  car  in  that  train 
will  have  a different  rate  to  New  York,  and  our  proportion  of  that  rate 
from  Buffalo  to  New  York  will  be  different  on  each  car.  Now,  we  can- 
not charge  any  more  for  a short  haul,  than  we  do  for  a long  one.  Then, 
how  are  we  going  to  find  out  whether  a contemporaneous  shipment  of  a 
car-load  of  the  same  kind  from  Buffalo  that  day  is  charged  more  than 
some  car-load  in  that  train  ? The  only  way  we  can  do  it  is  to  stop  that 
train  at  Buffalo,  examine  the  way-bills,  telegraph  to  the  points  of 
departure  for  information,  and  have  a committee  of  experts  to  sift  and 
arrange  each  shipment,  to  ascertain  what  is  the  lowest  rate  on  any  car  in 
that  train,  and  then  adapt  our  Buffalo,  and  our  Rochester,  Utica,  and  all 
intermediate  rates,  so  as  to  avoid  the  penalty,  to  the  lowest  rate  on  that 
train.  If  it  happens  to  be  a tim'e  of  cut-rates,  when  every  train  that 
arrives  will  have  a different  rate  for  every  car,  because  the  rate  at  Chicago 
changes  every  hour,  then  we  have  got  to  hold  them  until  we  can  ascer- 
tain the  lowest  rates  and  notify  every  station  along  our  line.  That  is 
simply  impossible.  To  get  this  information,  and  adjust  our  local  tariff 
at  every  station  would  compel  us  to  hold  every  through  freight  train  in 
Buffalo  three  days.  In  the  first  place,  shippers  would  not  stand  it.  In 
the  next  place,  the  connecting  roads  would  not  stand  it,  and  we  would 
have  to  give  up  that  business,  otherwise  the  Lake  Shore  & Michigan 
Central,  and  all  our  connecting  lines  would,  as  they  could,  give  the 
whole  of  their  business  to  the  Pennsylvania  at  Erie,  or  to  the  Grand 
Trunk,  and  avoid  all  these  difficulties.  I do  not  want  to  multiply 
illustrations,  but  if  you  can  get  over  that  one  I would  like  to  have 
you  do  it,  and  have  us  escape  the  penalty  and  not  violate  the  laws.  If 
you  can  get  over  the  illustration  of  the  Lehigh  Valley  road  either  taking 


22 


all  onr  business  at  Geneva  and  Lyons,  or  compelling  us  to  adjust  all  rates 
over  the  whole  line  to  any  rate  they  see  fit  to  take  under  this  bill,  at  those 
points,  I would  like  to  have  you  do  it.  Now,  as  to  these  penalties,  the 
people,  you  say,  would  never  go  to  the  expense  of  enforcing  them. 
There  is  a syndicate  of  lawyers  in  this  State  who  make  it  a business  to 
sue  the  railroads.  There  are  lawyers  in  every  city  and  village  along 
the  line  of  our  road  (and  I know  it  because  I am  the  general  counsel  of 
this  company,  and  it  all  comes  to  me,  and  barratry  is  no  longer  pun- 
ished in  this  State)  who  are  in  collusion  with  sheriffs,  justices  of  the 
peace,  coroners  and  even  our  own  agents,  for  the  purpose  of  notifying 
them  at  the  earliest  possible  moment  of  any  grievance  whatever,  real  or 
imaginary,  against  the  railroad,  whether  it  be  a personal  injury,  a land 
case  or  a damage  case  of  any  kind.  The  moment  they  are  notified 
they  go  to  that  man  and  ask  him  to  sign  a contract  which  reads  about 
as  follows : “ I agree  with  John  Doe  to  retain  him  to  conduct  this  case 

against  the  New  York  Central  Railroad  Company,  he  to  keep  me  harm- 
less against  expense,  and  I to  divide  with  him  one-half*  of  the  recovery.” 
I have  on  my  calendar  to-day  five  hundred  such  suits  brought  in  that 
way,  and  with  the  idea  that  we  will  settle  rather  than  fight  them, 
because  following  close  on  the  heels  of  the  summons  comes  the  lawyer 
to  us,  who  says : “ It  will  cost  you  five  hundred  dollars  to  fight  this 
case.  If  you  will  give  me  a hundred  dollars,  I will  settle.”  There  are 
now  only  few  opportunities  for  this  business,  but  you  see  how  diligently 
they  are  improved.  But  enact  this  law,  and  with  our  two  millions  of 
transactions  a year  what  would  happen  ? Why,  these  lawyers  in  every 
place  in  the  State  would  ask  every  shipper  in  their  town  to  send  his 
freight  bills  to  their  offices.  They  would  have  experts  to  look  them  over 
and  examine  them,  and  out  of  these  way  bills  every  day  they  would 
pick  a dozen  law- suits.  Do  the  best  we  could,  with  all  the  railroad  tal- 
ent in  the  world  and  the  purity  of  archangels  we  would  make  mistakes 
under  this  bill  which  would  subject  us  to  a thousand  suits  a month. 
The  penalty  under  the  passenger  act  is  fifty  dollars  for  each  vio- 
lation. In  that  case  it  is  only  a question  of  distance,  and  easily  ascer- 
tained. It  prohibits  onr  charging  more  thau  two  cents  per  mile.  It 
is  our  duty  to  know  whether  the  distance  is  correctly  measured 
or  not.  But  even  under  those  circumstances  we  .made  a little 
mistake  in  the  western  part  of  the  State,  involving  the  difference  of  a 
few  cents.  Two  enterprising  lawyers  found  it  out.  They  employed 
men  for  a year  to  ride  up  and  down  on  the  road,  and  take  a minute  of 
each  passage.  Then  they  brought  suits.  As  soon  as  they  were  com- 
menced the  secret  was  out,  and  great  numbers  of  attorneys  went  into 
the  business.  They  sent  to  every  man  in  Lockport,  Tonawanda  and 
Buffalo  who  had  ridden  on  the  New  York  Central  road  for  six  years, 
over  that  little  piece,  and  said  to  them  : “ Can  you  recollect,  so  you 


23 


can  swear  to  it,  how  may  times  you  have  ridden  over  the  New  York 
Central  & Hudson  River  railroad,  between  Tonawanda  and  Buffalo, 
in  the  last  six  years;  if  so  put  it  down  and  I will  get  you  fifty  dollars  for 
each  ride,  providing  you  will  divide  the  recovery  ?”  Then  the  unprin- 
cipled ones  enlarged  it  still  further,  and  took  names  irom  the  hotel 
registers,  and  among  others  the  names  of  some  of  our  directors,  with  the 
intent  of  having  some  loafer  personate  the  party  and  swear  he  was  the 
man  who  rode  over  the  road  on  that  day.  We  had  no  defense.  We 
could  not  tell  whether  Jack  Cole  or  Dick  Turpin  rode  over  the  road  on 
any  particular  day.  We  had  nothing  to  identify  him.  That  man  could 
come  into  court  and  swear,  “I  rode  that  day.”  We  were  utterly  help- 
less. The  aggregation  of  penalties  in  those  suits  reached  the  sum  of  four 
millions  of  dollars;  and  then  we  paid  about  three  hundred  thousand 
and  bought  them  off.  Under  this  bill  we  would  pay  three  millions  a 
year  to  buy  them  off;  but  it  would  be  a boom  for  the  lawyers. 
(Laughter.) 

Much  has  been  said  in  this  discussion  of  the  Pennsylvania  constitu- 
tion and  its  provisions  in  reference  to  railroads.  But  the  friends  of  this 
measure  persistently  conceal  and  misrepresent  the  situation  in  Pennsyl- 
vania. When  that  constitution  was  adopted  it  was  provided  that  if  at 
any  time  thereafter  any  railroad  company  desired  any  legislation  in  its 
favor  it  must  stipulate  to  accept  the  anti-discrimination  clauses  of  the 
constitution,  otherwise  their  charters  ante  date  that  instrument,  and  it 
has  no  application  to  them.  The  Pennsylvania  railroads  need  no  legis- 
lation, and  are,  therefore,  all  free  from  the  restrictions  these  gentlemen 
seek  to  place  upon  the  roads  of  New  York.  Greatly  as  the  Pennsylvania 
roads  might  desire  to  tie  up  their  New  York  rivals  with  these  provisions, 
which  they  reject,  it  is  only  ignorance  of  the  relations  of  the  Pennsyl- 
vania railroads  to  that  constitution  which  could  lead  any  one  to  hold  up 
here  for  your  guidance  Pennsylvania’s  example. 

The  passage  of  this  bill  would  work  such  a revolution  in  the  devel- 
opment and  power  of  this  State,  as  no  other  single  act  has  ever  done.  It 
would  stop  its  growth  and  prosperity,  close  great  numbers  of  its  manu- 
factories and  active  industries,  and  destroy  the  value  of  its  farms.  In 
the  close  communion  of  every  kind  of  business  with  every  other,  and 
the  interdependent  relations  of  farms  to  factories,  factories  to  centers 
of  population,  busy  and  thriving  populations  to  general  wealth  and 
progress,  legislation  intended  to  cripple  and  restrict  channels  of 
commerce  is  the  most  dangerous  of  experiments.  It  is  not  claimed  that 
this  bill  will  help  the  universal  revival  of  business,  the  blessings  of 
which  are  felt  everywhere.  The  most  its  best  friends  claim  for  it  are 
some  local  and  partial  advantages  to  a few  and  limited  interests,  while 
it  may  prove  a lasting  calamity,  not  so  much  to  the  railroads,  as  to  the 


24 


whole  State.  It  is  in  proof  already  before  you  that  one  mill  at  Utica, 
with  its  capital  of  $300,000,  all  subscribed,  is  unable  to  collect  its  sub- 
scriptions until  the  fate  of  this  act  is  decided,  and  if  it  should  become 
a law,  I predict,  that  not  only  will  that  mill  never  begin  operations, 
but  in  less  than  five  years  a special  session  of  the  Legislature  will  be 
devising  methods  to  place  New  York  once  more  in  her  old  but  lost  posi- 
tion as  the  Empire  State.  Behind  the  corporal’s  guard  who  have  come 
here  to  advocate  this  measure,  stand  the  Pennsylvania,  the  Baltimore 
& Ohio,  the  Grand  Trunk  and  the  Lehigh  Valley  railroads,  waiting 
anxiously  to  reap  rich  harvests  from  the  trade  diverted  from  New 
York  over  their  lines  by  this  supreme  folly. 

The  Commission  Bill. 

There  is  one  bill  here  which  has  n*ot  been  discussed  ; that  is  the  one 
relative  to  the  appointment  of  railroad  commissioners.  This  commis- 
sion bill  in  its  general  provisions,  is  like  the  one  which  has  made  its 
annual  appearance  here  for  many  years,  and  I presume  is  largely  copied 
from  the  Massachusett  law.  It  is  purely  a recommendatory  commis- 
sion which  costs  $45,000  per  year.  All  that  that  commission  can  do, 
to  correct  any  matters  brought  out  in  this  testimony,  is  now  done  by 
the  State  Engineer  and  Surveyor,  and  with  the  bills  already  passed 
his  powers  are  complete.  I want  to  say  right  here,  I hope  the  gentlemen 
of  the  investigating  committee  will  not  feel  sensitive  at  my  criticisms, 
I make  them  in  the  hope  of  shedding  the  greatest  possible  light  on  all 
sides  of  this  question.  When  they  say  the  result  of  their  investigation 
is  embodied  in  these  six  bills,  and  unless  they  all  pass  their  effort  is  a 
failure,  I think  they  are  in  error.  Railroad  legislation  can  be  distinct- 
ively defined  into  two  classes ; one  purely  experimental,  and  whenever 
tried  a failure,  to  run  the  business  of  the  companies  by  statute,  so  that 
every  freight  agent  must  make  a rate  or  a contract  with  a shipper, 
with  a volume  of  the  session  laws  in  his  hands ; the  other  regulating  the 
integrity  of  their  management  and  control,  and  the  proper  and  truthful 
exhibit  of  their  affairs  to  the  public.  The  testimony  developed  that 
there  had  been  scandal  in  the  use  of  proxies,  that  they  had  been  bought 
by  speculators  who  had  thus  secured  the  control  without  owning  any 
stock.  The  committee  have  met  and  have  overcome  that  difficulty. 
There  has  been  great  feeling  against  stock  watering  and  the  evils  which 
flow  from  it.  The  committee  have  met  that  and  overcome  it.  There 
has  been  great  complaint  of  the  evils  that  result  from  consolidation  and 
the  piling  up  of  capital  and  debts.  The  committee  provided  success- 
fully against  that. 

The  main  grievance  of  the  professional  railroad  reformer  for  the  past 
five  years  has  been  that  railway  reports  were  defective  and  the  true 


25 


condition  of  the  companies  could  not  be  ascertained.  During  the  first 
days  of  the  investigation,  when  the  prosecution  was  groping  around  for 
greivances,  this  question  of  full  and  inquisitorial  exhibits  for  the  benefit 
of  stockholders,  bondholders  and  the  public,  was  the  burden  of  their 
eloquence.  The  committee,  with  great  care  and  ability,  have  prepared 
a form  of  report  to  the  State  Engineer  and  Surveyor  which  shows  the 
operations,  and  exhibts  the  exact  condition  of  the  railroads  for  the 
examination  and  information  of  any  person  who  wishes  to  look  at  them. 
Every  secret  of  the  road  in  regard  to  its  condition,  its  solvency,  its 
management  under  the  oath  of  responsible  officers,  who  can  be  impris- 
oned for  perjury,  is  laid  before  the  State  Engineer  and  Surveyor  for  the 
inspection  of  the  public,  the  State  and  the  Legislature.  So  that  in 
these  bills  the  interior  of  this  question,  the  real  greivances  of  railroad 
management,  are  met  and  overcome  with  great  ability  and  clearness. 

When  it  comes  to  a commission,  I cannot  see  what  a commission  can 
do  more  than  the  State  Engineer  and  Surveyor,  an  officer  elected  by  the 
people.  In  every  State  where  a commission  exists  to-day,  the  commis- 
sioner has  no  ministerial  functions,  simply  because  the  transportation 
problem  is  one  of  national  importance ; the  commissioner’s  authority 
stops  at  the  boundaries  of  his  State ; he  might  possibly  take  his  State 
out  of  the  national  system,  but  that  he  dare  not  attempt ; he  is  tied 
hand  and  foot,  and  he  is  simply  the  recipient  of  the  reports  of  the  rail- 
ways, and  the  transmitter  of  them  to  the  Legislature. 

If  we  had  a commission  in  this  State,  it  would  be  substituting  three 
healthy  patriots  and  their  dependants  to  draw  $45,000  a year  to  perform 
the  duty,  now  done  by  a bureau  in  the  office  of  an  officer  elected  by 
the  people  of  the  State  and  provided  for  in  the  constitution.  In 
the  bill  itself  is  a singular  anomaly.  It  authorizes  the  commis- 
sioners to  recommend,  if  they  think  proper,  the  increase  of  trans- 
portation accommodations  and  rolling  stock,  alterations  at  stations, 
and  changes  in  fares  and  freight.  If  the  company  does  not  accept 
their  recommendations,  they  can  report  the  company  to  the  attorney- 
general  for  him  to  take  action  for  the  abrogation  of  their  char- 
ters. If  the  company  do  adopt  their  recommendations,  the  fact  that 
the  commissioners  made  the  recommendation  under  threat  of  loss  of 
chartered  rights  if  not  adopted,  does  not  relieve  the  company  from  legal 
liability  for  having  followed  the  recommendation.  Then  the  roads 
must  stand  between  the  two  horns  of  the  dilemma.  We  had  a railroad 
commission  in  this  State  once ; it  lasted  between  two  or  three  years. 
The  people  got  tired  of  the  commission,  because  it  accomplished  no  good, 
and  was  thought  to  act  in  the  interest  of  the  roads.  The  railroads  got 
tired  of  it,  because  it  was  a perpetual  annoyance,  and  with  the  common 
consent  of  the  people  and  the  railways  the  commission  was  abolished. 


26 


A generation  has  passed  since  then,  and  there  has  been  no  attempt 
to  revive  it,  until  brought  here  in  the  last  few  years  under  pretence  of 
railroad  reform,  but  really  to  make  places  for  the  gentlemen  who  were 
disinterestedly  giving  their  time  to  lobby  it  through.  Will  we  have 
any  better  commission  now  ? Are  the  times  improved  ? Can  the  legis- 
lature, any  more  safely  now  than  then,  delegate  its  powers  to  three 
politicians  ? I do  not  believe  much  in  paternal  government,  nor  do  I 
believe  much  in  State  supervision.  We  have  had  State  supervision  in 
this  State  for  the  last  twenty-five  years — the  Bank  and  the  Insurance 
Departments,  created  in  each  case  to  meet  a political  and  not  public 
exigency,  to  take  care  of  individuals  and  not  to  protect  the  people.  I 
know  their  origin.  They  were  taken,  one  out  of  the  the  Comptrollers, 
and  the  other  out  of  the  Secretary  of  State’s  office,  and  created  into 
departments  with  all  the  machinery  of  high  salaried  officers  and 
deputies  and  clerks,  and  the  ever  increasing  and  costly  paraphernalia 
of  power.  What  is  the  result  of  twenty-five  years  of  State  super- 
vision and  State  responsibility  for  these  institutions  ? I say  that 
it  is  a farce  and  a fraud.  Fifty  millions  of  dollars  have  been  lost  in  this 
State  within  the  last  twenty-five  years  in  Savings  Banks,  in  State  Banks, 
in  Life  and  Fire  Insurance  Companies.  Why  ? Because  the  State  said 
to  the  depositors,  the  State  said  to  the  stockholders  and  policyholders,  put 
in  your  money,  never  inquire,  we  will  look  after  everything.  The  State 
put  forth  that  pretence,  and  when  the  banks  failed  and  the  Insurance 
Companies  became  insolvent,  the  investigation  always  showed  that  the 
directors  as  well  as  the  depositors  and  policyholders  relied  upon  the 
paternal  care  and  pledge  of  the  State,  instead  of  exercising  for  them- 
selves constant  scrutiny  and  watchfulness.  If  the  State  had  required 
frequent  and  full  reports  of  the  condition  of  these  companies  to  a respon- 
sible State  officer,  and  said  to  the  stockholders  and  creditors,  with  this 
data,  you  must  exercise  constant  vigilance  and  inquiry,  for  the  State 
neither  guarantees  or  reimburses,  who  doubts  that  millions  might  have 
been  saved. 

But  the  conditions  which  apply  to  places  of  deposit  — places  that 
take  care  of  other  people’s  money  — do  not  apply  at  all  to  the  railroad. 
The  stockholders  and  the  bondholders  look  out  for  themselves;  and  so 
long  as  the  railway  commissioner  must  stop  at  the  State  line,  and  cannot 
reach  beyond  it,  so  long  as  he  can  neither  touch  or  control  lines  outside 
the  State  competing  with  roads  under  his  jurisdiction,  so  long  he  re- 
mains simply  a bureau  for  the  receipt  and  dissemination  of  information. 
It  is  claimed  that,  under  this  bill,  the  commissioners  would  look  after  and 
provide  against  accidents.  What  protection  has  a similar  power  given 
in  other  States  ? The  commissioners  of  the  State  of  Connecticut  did 
not  prevent  the  frightful,  and  almost  inexcusable,  accident  at  Tariff- 
ville,  and  when  called  upon  to  explain  why  it  had  not  discovered  in 


27 


time  the  defects  of  the  structure  which  led  to  it,  what  did  the  State  do  ? 
Upon  the  State  rested  the  responsibility  for  the  life  of  every  man, 
woman  and  child  who  died  miserably  and  horribly  at  Tariffville,  because 
the  State  had  said  to  all  passengers:  “We  will  see,  by  a responsible 
officer,  that  no  accident  of  that  kind  occurs,  and  relieve  both  the  travel- 
ing public  and  the  railways  of  either  care  or  responsibility  ? When  the 
holocaust  at  Ashtabula  happened,  wffien  fifty  miserable  people  roasted 
alive  in  the  gulch,  where  was  the  commission,  and  where  was  the  State  ? 
Each  one  of  those  men,  women  and  children  traveled  upon  the  faith 
and  credit  of  State  protection  and  supervision,  and  there  burned  and 
died  in  agony,  because  State  supervision  was  a farce  and  a fraud.  The 
claim  is  made  that  the  commission  can  better  watch  the  solvency  of 
railroads,  and  protect  the  investing  public ; but  under  the  very  eyes  of 
the  Massachusetts  commission  — admitted  on  all  sides  to  be  the  best 
ever  formed  — the  Eastern  railway  collapsed,  and  the  Boston,  Revere 
Beach  & Lynn  Railway  went  into  bankruptcy,  causing  frightful  and 
ruinous  losses  to  innocent  people  who  were  relying  solely  and  wholly 
upon  the  protecting  care  and  delusive  promise  of  the  State. 

There  is  another  reason  — for  we  are  talking  plainly  this  afternoon  — 
why  I object  to  a State  commission.  I am  not  afraid  of  it ; the  New 
York  Central  road  is  not  afraid  of  it ; there  is  nothing  in  the  business  of 
the  New  York  Central  railroad,  nothing  in  its  management,  that  will 
not  bear  the  scrutiny  of  the  State.  It  is  run  with  that  business  ability, 
rigid  economy,  sharp  lookout  to  get  business  and  do  business,  and  con- 
stant watchfulness  of  the  money  which  comes  in  and  goes  out,  which 
enables  it  to  live  and  pay  these  dividends  these  gentlemen  complain  of, 
notwithstanding  the  wildest  and  widest  competition.  The  New  York 
Central  is  run  by  honesty  and  brains.  Eliminate  intellect  and  integrity 
and  it  will  never  pay  another  dividend.  What  public  interest  is  to  be 
advanced  by  testing  the  question  whether  a commission  shall  run  the 
railroad,  or  the  railroad  run  the  commission  P We  do  not  want  to  be 
put  in  a position  where,  at  the  behest  of  a commission  of  this  State,  we 
shall  be  compelled  to  run  the  road  to  put  one  party  in  power  and  the 
other  party  out  of  power.  Do  not  deceive  yourselves  with  the  idea  that 
such  will  not  be  the  case.  The  conditions  which  exist  in  the  State  of 
New  York  apply  nowhere  else. 

Massachusetts,  Ohio,  Michigan,  all  the  States  where  they  have  these 
supervising  commissioners  are  little  teapots  where  you  can  lift  the  lids 
and  look  over  the  edge  and  see  and  count  every  leaf,  compared  with 
this  great  State  with  its  5,000,000  of  people,  with  its  great  city  of  New 
York,  with  her  demands  and  needs,  with  its  other  cities  outstripping 
the  largest  cities  of  other  commonwealths,  and  all  the  spoil  of  party, 
with  conflicting  interests  struggling  for  the  control  of  a State  which  is 


28 


an  empire  in  itself,  struggling  for  the  control  of  the  legislature,  the  State 
offices  and  boards,  the  public  works  and  State  prisons,  and  the  handling 
and  manipulating  of  vast  patronage  and  millions  of  money.  The  tem- 
ptation is  too  great  for  partizans  to  resist  the  opportunity  to  use  every 
agency  to  get  into  power,  and  once  in,  to  stay  there.  Do  you  think  the 
corporations  would  resist?  Gentlemen,  do  not  mistake  the  nature  of  a 
corporation.  A corporation  is  simply  a score,  or  a 100,  or  a 1000  people 
putting  their  money  into  an  enterprise,  requiring  more  capital  than 
any  one  of  them  possesses,  and  they  elect  directors  and  officers  to  con- 
duct that  business.  The  stockholders  expect  them  to  do  one  thing,  use 
their  best  efforts  to  promote  that  business  and  to  see  that  it  is  not  in- 
jured. Now,  the  corporation  under  such  circumstances  is  always,  and 
at  all  times  the  most  subservient  and  supple  tool  of  the  governing  power. 
Talk  about  monopoly,  talk  about  the  grasping  power  of  the  corporation  ! 
The  corporation  stands  with  trembling  knees  in  the  presence  of  power, 
because  power  created  and  power  can  destroy  it ; power  gave  the  pledge 
under  which  these  people  put  their  money  into  the  enterprise,  and 
power  can  violate  the  pledge  and  destroy  the  money  which  is  in  the 
enterprise.  No  courtier  at  the  court  of  St.  Petersburg  is  more  obser- 
vant of  the  temper  of  authority,  than  is  the  corporation  whose  life  is 
dependent  upon  the  will  of  the  governing  body.  Now,  then,  if  for  the 
purpose  of  carrying  a State  or  controlling  a convention  these  three  com- 
missioners who  are  to  stand  between  us  and  the  legislature,  who  are  to 
stand  between  us  and  the  people,  between  us  and  harm,  come  to 
our  office  and  say : “ The  necessities  of  the  political  situation 

require  that  certain  political  henchmen  of  the  party  shall  receive 
employment  upon  your  line,”  would  they  be  denied  ? If  they  should 
come  and  say  that  certain  useful  henchmen  of  the  party,  useless  in  busi- 
ness, but  useful  in  caucuses,  must  be  placed  upon  the  pay-roll,  would 
they  be  denied  ? If  they  should  indicate  that  at  some  centers,  where 
a large  number  of  men  are  employed,  an  obnoxious  candidate  against 
the  machine  must  be  beaten  in  the  caucus,  do  you  think  there  would 
fail  to  be  enough  votes  in  that  caucus  to  mash  him?  Not  much. 
(Laughter.)  Now,  the  politics  of  the  raihoads  of  this  State  are  abso- 
lutely colorless.  Any  superior  officer  on  the  line  of  the  New  York  Cen- 
tral & Hudson  River  railroad  who  should  threaten  the  humblest  track 
walker  at  a dollar  a day  with  the  loss  of  his  place  if  he  did  not  vote  for 
this  or  that  candidate  would  have  his  head  cut  off  as  soon  as  the  news 
got  down  to  the  Grand  Central  Depot.  I have  stood  here  battling 
and  resisting  the  hostility  of  powerful  senators  and  members  who 
have  made  their  support  or  opposition  to  measures  calculated  to  help  or 
injure  the  New  York  Central  dependent  entirely  upon  the  removal  of 
local  agents  of  the  company,  faithful  in  their  business,  but  politically 
obnoxious  to  these  legislators.  Mr.  Vanderbilt  has  always,  and  without 


29 

regard  to  consequences,  protected  the  employes  of  the  company  under 
such  circumstances. 

Remember,  all  railroad  men  are  natural  politicians.  The  business  of 
a railroad  in  its  sharp  competition,  in  its  contact  with  men,  makes  every 
agent,  conductor,  brakeman,  baggageman,  sandbank  man,  alert  on  all 
public  questions,  and  active  in  the  politics  of  his  neighborhood,  on  one 
side  or  the  other. 

We  do  not  care  how  he  votes  or  acts,  so  long  as  he  does  not  prostitute 
the  road  to  carry  his  purposes  in  the  caucus,  or  at  the  polls.  If  his 
enemy,  in  the  party  or  out  of  it,  wants  that  man  removed  on  account  of 
his  vote  or  his  views  as  a citizen,  there  is  no  power  to  do  it.  I have 
known  municipal  officers  to  say,  “unless  certain  changes  are  made, 
which  are  required  by  the  party  exigencies  at  our  place,  you  cannot  rely 
upon  local  or  municipal  favor,”  and  at  the  loss  of  thousands  upon  thou- 
sands of  dollars  a man  whose  place  was  not  worth  a breath,  whose  salary 
was  under  a thousand  dollars  a year,  was  protected  in  his  rights  because 
the  president  would  not  permit  any  single  political  consideration  in  a 
locality  to  dominate  over  the  business  interests  of  the  road.  (Applause.) 
But,  gentlemen,  let  that  dominating  power  be  concentrated  and  centered 
in  the  State  itself,  represented  by  three  political  commissioners  who  can 
molest  every  branch  of  our  business,  leave  us  alone  or  interfere  with  us, 
cripple  our  energies  or  permit  us  to  work  out  our  own  prosperity,  and 
then  we  have  no  resource  but  to  protect  our  stockholders,  creditors  and 
patrons  by  making  the  best  terms  with  the  commissioners  we  can. 

While  bald  corruption  may  not  characterize  the  relations  of  the  com- 
pany to  the  commission,  this  thing  frequently  happens.  All  their  impe- 
cunious relatives,  their  “ sisters  and  their  cousins  and  their  uncles  and 
their  aunts,”  find  their  way  upon  the  pay-rolls  of  the  corporation.  All 
politicians  have  men  dependent  upon  them,  whose  use  and  value  in  the 
party  organization  are  thoroughly  understood,  and  in  some  way  they 
must  be  protected  and  cared  for.  Then,  brothers-in-law,  friends  who 
cannot  be  denied;  men  in  power,  who  must  not  be  offended,  have  inter- 
ests in  patent  rights  and  devices.  The  commissioners  have  the  power 
to  recommend  their  use.  Where  they  do  not  choose  to  do  that,  there 
are  a hundred  ways  in  which  a commissioner  can  indicate  that  his 
pleasure  or  displeasure  will  follow  the  company’s  treatment  of  the  appli- 
cation. It  is  comparatively  easy  for  the  companies,  at  some  expense  and 
loss,  at  great  annoyance  and  discomfort,  to  secure  perpetual  immunity. 
But  you  will  inaugurate  a great  and  growing  public  scandal,  abhorent  to 
the  sense  and  judgment  of  every  right  minded  man. 

Gentlemen  of  the  committee,  I trust,  that  in  the  consideration  of  these 
great  questions,  you  will  not  be  governed  by  hasty  judgment,  or  base- 
less prejudice.  Remember  that  it  is  not  the  corporation  which  stands  at 


30 


the  bar  of  this  house.  It  is  not  the  railroad  alone  to  be  executed  or  go 
free,  but  every  business  and  industry  in  the  State,  the  commonwealth 
itself,  have  all  their  interest  at  stake.  Prosperity  everywhere  prevails, 
and  ninety-nine  hundredths  of  the  people,  the  localities,  and  the  enter- 
prises of  the  State  are  satisfied ; the  little  isolated  exceptional  cases  of 
discrimination  or  of  injury,  cannot  be  corrected  by  any  general  law, 
and  in  making  the  attempt,  take  care,  that  in  amputating  the  little 
finger,  you  do  not  destroy  the  life  of  the  whole  body.  Remem- 
ber that  with  the  inter-dependent  relations  of  the  railway  system  of  this 
State,  in  the  great  western  traffic  and  the  local  business  of  the  State 
itself,  both  of  which  contribute  to  make  her  the  empire  in  population,  in 
commerce,  in  finance,  you  cannot  afford  so  to  tamper  or  interfere,  as  to 
leave  New  York  in  a condition  where  she  will  be  fatally  injured.  Mr. 
Sterne  criticised  Mr.  Blanchard,  because  he  said  that  the  railroads,  if  let 
alone,  will  make  this  State  greater^and  greater  every  year,  as  insolent 
and  king  like ; but  Mr.  Sterne  had  his  mind  full  of  continental  ideas 
and  German  notions  of  govermental  control  and  bureaucratic  govern- 
ment. Mr.  Sterne  did  not  take  into  consideration  the  one  dominant, 
controlling  fact  that  the  New  York  roads  under  conditions  of  longer  haul 
and  greater  expense  at  their  seaboard,  are  doing  their  best  to  retain  for 
themselves  and  the  State,  and  the  city  of  New  York,  the  business  of  the 
continent,  and  unless  fatally  restricted,  and  lifted  out  of  the  railway 
system  of  the  country  by  your  action,  will  retain  it,  and  make  and  keep 
New  York  State  and  New  York  city,  the  one,  Empire  among  States, 
and  the  other,  metropolis  of  the  western  hemisphere,  and  the  most 
important  city  in  the  world.  (Great  applause.) 


